Grab and Singtel won a digital bank licence — analysts warned it wasn't easy money

Grab runs Southeast Asia's superapp with GrabPay; Singtel is Singapore's biggest telco with the Dash e-wallet. Together they won a Singapore digital banking licence in December 2020.

A superapp and a telco can combine their customer bases into an all-digital bank that scales regionally — though almost no one has made the model profitable.

The consortium won its Singapore digital banking licence in December 2020, with plans to launch the bank in early 2022.

DBS analyst Sachin Mittal warned the alliance could struggle with monetisation more than Kakao Bank — the rare profitable digital bank, which broke even in 2019 under three years — because Singapore's incumbents were more digitally advanced, the market smaller and more mature, and Kakao's apps more entrenched in daily life (Kakao Talk had 45.8 million active domestic users feeding Kakao Pay). Orange Bank, the closest comparable telco venture, lost €160 million in 2019, up from €147 million in 2018. Singtel's own record was thin: Dash, launched in 2014, reached one million users, and its international group segment — which houses remittances and payments — generated just S$10 million in turnover for the year to March 2020 while loss-making. Jefferies named scaling retail deposits as the core challenge; CGS-CIMB pointed to regional licences in Malaysia and Indonesia as the potential game changer. Neither partner expected major earnings impact before 2025.

Cross-selling to existing user bases was the whole thesis, and both partners' wallets had modest traction to build from.

Incumbent banks in Singapore were already digital-first, unlike Korea's in 2015, removing the technology gap that let Kakao Bank win.

The model's only clear profitable example, Kakao Bank, succeeded on chat-app entrenchment the consortium could not copy.

A regional multi-market bank, not a Singapore retail bank, was the only path to meaningful earnings — and that was years away.

A licence is permission, not a business model: in digital banking, the scarce asset is daily engagement and cheap deposits, and neither telecom reach nor ride-hailing frequency converts automatically.

As of December 2020, the bank was planned for an early-2022 launch, with analysts not expecting major earnings impact until 2025 at the earliest and Singtel shareholders advised to temper expectations.